Correspondents say the scandal is embarrassing for the French Socialist government which has made fighting tax evasion a priority, as it tries to cut public debt.

BBC: French ex-budget minister Jerome Cahuzac bows out

Rampant tax evasion has played and continues to play a significant role in the Greek debt crisis, although it does appear that in 2010 the country is going after tax cheats as never before.

FORBES: Cash Is Zeus: A Postcard From Greece

True, Italian governments have proved adept over the years at finding ways to tap the country's substantial wealth to service its eye-popping levels of sovereign debt, but this has been largely achieved by introducing ever higher and more complex taxes that only encourage tax evasion while simultaneously sucking the life out of the economy.

WSJ: Post-Election Inaction Could Reawaken Crisis